Why Senior Care Franchises Work
Health care franchises have seen strong growth over the last few years with the need for home care services increasing as the baby boomers scrambled to find care for their parents. With the oldest boomers beginning to turn 65 themselves in 2011, there is a tremendous population that will begin to need these services, which casts a bright future for the industry.
Right at Home franchisees have seen incredible financial results, with sixty eight of our franchisees whose offices had been open for at least 12-months for the period ending December 31, 2011 earning over one million in net billings (sales) in 2011.* But it’s not just the baby boomers that make this such an appealing business.
Low cost of entry
Comparatively speaking, a senior home care franchise is an affordable business to open and operate when you consider it against other types of businesses. With a Right at Home franchise, there are minimal startup costs initially, and on a month to month basis your ongoing costs are relatively low – with most of those being basic office expenses such as rent, utilities, etc. The biggest cost in our business is caregiver labor – and you only pay caregivers when they are generating revenue through providing care to clients. The graph in this report gives a great depiction of where the home care industry stacks up compared to others in franchising.
No expensive retail location
At Right at Home, our services are provided in the homes of our clients. While franchisees do have a small office space to operate their business, the need to find a large space with the best retail location, good traffic and a special ambiance is taken out of the equation. This means lower rent cost and quicker startup compared to what a restaurant or retail business would require.
At Right at Home, technology is your friend, not your enemy! The care we provide to our clients can’t be outsourced overseas, and it can’t be replaced with robots. With that being said, technology certainly will play an increasingly important role in our business because it enhances our communications capabilities and service offerings, and it makes our business model more efficient. But technology will never be able to replicate the compassion and companionship offered by a Right at Home caregiver.
Think about the senior home care franchise industry in contrast to other, more transactional-oriented businesses. When operating a retail shop or restaurant, you are constantly trying to find ways to get customers into your store. Whether it’s offering up sales or nightly specials, or some other trial and error tactic, finding a way to attract that repeat customer can be elusive. However, in the senior home care industry, finding one customer can create a revenue stream that lasts weeks, months, or even years. In addition, as the client ages, the level of care may also increase. The companionship care that a client starts receiving today might eventually evolve into personal care or even nursing services, which obviously has a positive impact on your business. With a Right at Home care franchise you typically find a customer once, secure a deposit, and then set them up for care and billing on a weekly basis. So, creating a repeat customer is an integral part of the Right at Home business model.
With many businesses your revenue comes from the inventory you sell, which presents a completely different set of challenges related to inventory management. It also ultimately means there is the risk that you may buy more inventory than you can sell. With Right at Home, your “inventory” is the care you provide for your clients, which means you’ll never have a storage room full of products that you can’t sell.
Satisfied franchisees make good business builders
I believe that a big part of the reason senior care franchises have been so successful is because of the satisfaction level noted in industry studies. For example, according to a report released by the Franchise Business Review, in 2012 senior care franchisees rated their satisfaction higher than the benchmark in every category of their annual survey. Much of this has to do with the combination of providing a fulfilling service. In addition, many franchisees have noted that providing a service that allows them to connect with the community adds to their high satisfaction levels.
As you can see, the senior care franchise industry has a strong future. As an affordable, time withstanding, and profitable option for entrepreneurs, this business will continue to build momentum in the coming years.
*Net Billings in 2011 for 191 Offices open one year or more as of December 31, 2011. 68 or 36% of these Offices attained or surpassed the represented level of financial performance.